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Unilever Puts Pure Leaf in Teabags

Lipton Yellow Label is languishing on the bottom shelf in grocery, discounted to less than $5 for a 100-ct box, but it’s still the top-selling brand in the world.

Since Unilever acquired Lipton in 1972, the brand has achieved significant financial milestones. It was the first to reach $2+ billion in sales and, more recently, was the first major brand to become certified sustainable by the Rainforest Alliance, a task that took eight years.

The company spent $40 million on its first worldwide marketing campaign. Advertising in prime time with The Muppets was costly and the “be more tea” social media launch remains visible, but Unilever recognizes that premium tea cannot survive at $3.28 for 200 grams retail—that’s 3.2 cents per teabag.

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In contrast, Unilever’s partnership with PepsiCo to distribute ready-to-drink tea is on a tear. Last week, Unilever decided to capitalize on that trend by introducing its Pure Leaf bottled brand in tea bags. The 16-ct jar of pyramid bags weighs 40 grams and sells for $4.48 or 28 cents per teabag (about 10x more than Yellow Label with both discounted at Walmart). A 5.8-ounce jar of Pure Leaf’s loose leaf gunpowder green sells for $6.48 or $1.12 per ounce (28 grams).

In a press release, Unilever Tea Director George Hamilton said “We at Pure Leaf believe that the most delicious tea is real tea, simply picked, rolled and crafted from sustainably grown leaves. We have poured all of our expertise into this new range.”

Lipton is experimenting with similar premium offerings including green tea and a specialty black range as well as single-origin teabags from Kericho estate in Kenya. In France, Lipton is doing quite well with tea in capsules designed to brew in its new T.O. teamaker, and its T2 specialty retail stores continue to expand worldwide, but in the U.S., Pure Leaf is simply a better bet in the premium category.